Although on copy book technicals it may seem to be a head and shoulder but as seen above chart we need to look into the longer term channel which has three previous bottoms. In simpler terms none of the technical patterns can be taken in isolation and one needs to amalgamate all the technical observations before making a conclusive analysis.

We may also look into an interesting observation of how one needs to use Nifty and Sensex analysis together to get a more clear picture.

For now lets get into the short term Technical Picture

Sensex Technical View :

- > The strong bounce back with a good gap suggests the support for now comes to around 17800 which is a bit deep from current levels so one may look towards profit booking if bought on declines.

- > On the upside 50 dema at 18300 and previous trendline resistance at 18600 will be very strong resistance.

- > With the bounce back being sharp there could be good trading opportunities in specific stocks.

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Have you noticed the Double bottom with Positive divergence in MACD? How reliable is this signal? I have seen similar signal in the charts between Nov 08 and March 09. Double bottom + Positive divergence in MACD.